Condo sales surge as house prices climb
Average price jumps 7.4% in a year, Toronto Real Estate Board says, and sales leap 15.4%.
Susan Pigg – Toronto Star
Gera Nevolovich has accepted that he will never be able to afford a house in Toronto for his two young sons. He considers himself lucky to be living in the next best thing – a two-bedroom condo within easy walking distance of the Davisville Park soccer fields.
His family of four is just one tiny part of the wave now pushing the GTA condo market to new highs: Sales were up 20% in June, year over year, and the average price of a condo in the City of Toronto has climbed to almost $400,000, according to figures released by the Toronto Real Estate Board (TREB) Friday.
Comment: So can we stop talking about the condo crash that is NOT happening?
With the price of houses continuing to skyrocket out of reach – a detached in the city averaged $921,127 in June – the two-bedroom condo and the townhouse condo are quickly becoming the hottest tickets in town for young buyers, realtors say.
Comment: Note, though, that the average detached price was as high as $965,670 in April. It has actually come down since then. But it will break the million-dollar mark next April or May, mark my words. Maybe even before that.
“I’m seeing people really changing their expectations now and asking, ‘Do we want that house or do we want the city?'” says realtor Lauren Haw. “Obviously houses are still hot and that’s not going to cool down anytime soon, but we’re really seeing the comeback of the condo.”
Comment: Not so much a comeback as condos are now becoming an option for a family. They used to be more for older folks, empty-nesters. Then first-time buyers. More recently, the news was dominated with tales of investors and their condos and tenants. Now, larger condos are becoming potential family homes, as house prices to continue to rise out of reach of most.
Surprisingly, a good number of young buyers now are just like the 33-year-old Nevolovich: They got hooked on condo life close to city amenities but were forced out of their one-bedroom suites when their babies were born, only to find that life in a big house with a killer commute to work just wasn’t worth the price.
“We had a dream of having a place where we could put a little swimming pool out back in the summer for the kids. We were happy … for about a week,” he says of the four-bedroom Maple home where they lived until a year ago, before moving into a two-bedroom condo in the Yonge-Eglinton area.
“The disillusionment hit when all the maintenance started piling up. The hour-long commute up and down the 400 has turned into a seven-minute walk to the office.”
The down side, he admits, is having to make calls from the balcony when his sons, aged 3 and 2, are napping.
Comment: Poor snooky! I work most of the day at my dining room table. When the kids are home, things bounce off my head, I answer questions as I write emails, you deal with it. I talk on the phone on the porch sometimes. There are much worse compromises to make!
Condos, in fact, led the way in year-over-year sales growth across the GTA in June, according to TREB.
Condo sales were up 21.4% in the City of Toronto in June from a year ago, and up 16.7% in the 905 regions.
Prices were also up: 6.3% in the City of Toronto to an average of $390,569 and 7.5% in the 905 regions to $309,719.
Comment: I think detached houses have topped out for the time being. Now we are going to see the most growth in the lower price brackets. Condos, townhouses and semis. And that is born out in the stats for last month. Townhouses rose 10.9% in price, then semis at 8.8%, condos at 6.3% and finally detached houses at 6.0%.
Realtors say they’ve seen a growing confidence in the condo market since sales, and prices, slipped two years ago and many buyers jumped to the sidelines, only to watch house prices rise out of sight, leaving condos as the only affordable option.
Comment: Sales slipped a little, but prices didn’t really. There was a month or two of prices staying flat or maybe falling 1-2%, but they never really went down an appreciable amount or for any length of time.
Demand has really picked up for condos built a decade or so ago, say realtors, because they tend to offer better and bigger living space than today’s new units, which now average less than 800 square feet, down from over 900 square feet that new units averaged just five years ago.
But space seems to be the big draw at almost any price point, notes realtor Andrew Harrild, who just listed a 1,571 square foot loft on Broadview Ave. this week for almost $1 million and was shocked to have 15 requests for showings the first day.
While June is normally the start of the summer slowdown, realtors credit the long winter with later-than-usual demand that helped push up sales 15.4% in June, year over year, and saw GTA house prices climb to $568,953, up 7.4% over a year ago, according to TREB.
Comment: The summer slow down has largely evaporated over the past few years. I think the increase in listings has a lot to do with the bump in sales. Curious why listings suddenly rose, after months and months and months of decreases.
Semi-detached homes were also in top demand – in large part a reflection of the leap in prices for detached homes – with the average sale price up almost 16.1%, year over year, to an average of $672,725 in the 416 region and $448,531 in the 905 regions.
Detached homes, which had edged perilously close to $1 million in the 416 back in the spring when higher-end new infill homes saw a spike in sales, slipped again in June, to an average sale price of $921,127 in the City of Toronto and $641,972 in the suburban regions.
Townhouses and row houses saw sales climb 14.5% across the GTA, with average prices up 10.9% to $485,273 in the City of Toronto and up 7%, to $402,261 in the 905 regions, according to TREB.
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Contact Laurin Jeffrey for more information – 416-388-1960
Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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